Biotech Buying Bonanza: Iveric Bio Snags $5.9 Billion Deal From Astellas Pharma
The company is working on a treatment for the eye disease known as geographic atrophy, which is the progressive loss of retinal cells.
Astellas (ALPMY), a pharmaceutical company, has acquired Iveric Bio for $5.9 Billion in cash. The announcement sent ISEE shares soaring.
In three months, the Food and Drug Administration (FDA) will decide whether or not to approve Iveric’s avacincaptadpegol, also known as ACP. ACP was tested on patients suffering from age-related macular disease. This condition can cause permanent vision loss.
Astellas CEO Naoki Okamura said Iveric "has capabilities across the entire value-chain in (the field of) ophthalmology."
Okamura stated in a statement that "we believe this acquisition will allow us to provide greater value to patients who have ocular disease at high risk for blindness."
ISEE's shares soared by 14% in morning trading on the stock market today, near 37.50. Astellas' stock rose 1.4% to $15.22.
ISEE Stock: Huge Premium
Both boards have approved the deal. The ISEE stock is valued at 40 dollars per share. This is a 64% increase over the March 31 closing price and a 75% increase over the 30-day volume weighted average price at the same time. Both companies expect that the deal will close in the second half of the year.
In a report, Wedbush's David Nierengarten stated that Astellas would fund the deal using a combination of debt and cash. He downgraded ISEE to a neutral stock rating and increased his price target from 35 to 40.
Iveric also works on treatments for eye conditions such as Stargardt disease and Leber congenital Amaurosis Type 10. This condition affects both hearing and vision.
The shares of Apellis Pharma (APLS) fell 2.5%, to 81.11. Apellis is the sole manufacturer of Syfovre, the only treatment for geographic atrophy that has been approved by the FDA. Astellas drug was approved by the FDA in February.
ISEE has been on an upswing since March 31. The shares soared by more than 35% in April. Stock has the best possible Relative Strength rating of 99. According to ISEE, the stock is in the top 1% for 12-month performance.